https://media.cnn.com/api/v1/images/stellar/prod/190111163455-russia-t-34-tank.jpg?q=x_107,y_181,h_1347,w_2394,c_crop/h_653,w_1160/f_webp
Posted on 04/08/2025 11:20:37 AM PDT by hardspunned
MOSCOW, April 8 (Reuters) - A sharp drop in global oil prices triggered by U.S. President Donald Trump's tariffs poses a risk to the Russian economy, the state TASS news agency cited Elvira Nabiullina, the governor of Russia's central bank, as saying on Tuesday. She was quoted as saying that the central bank was analysing the fallout, but as saying that a technical budget rule would smooth out the consequences for the budget.
As of Monday, Brent and WTI had slumped 14% and 15% respectively following Trump's April 2 announcement of "reciprocal tariffs" on all imports. "You are absolutely right that the main channel of influence may be through changes in oil prices, specifically a decrease in oil prices," Nabiullina was quoted by TASS as telling members of the Russian lower house of parliament. "If such tariff wars, and we are seeing an escalation of tariff wars, continue, it usually leads to a decline in global trade, the global economy, and possibly even the demand for our energy resources," she said.
(Excerpt) Read more at reuters.com ...
From Grok:
When Russian crude oil prices fall to $50 per barrel, the impact on Russia’s economy is significant because oil and gas exports are a cornerstone of its fiscal health. Historically, energy exports have accounted for about 30-40% of Russia’s federal budget revenue and over 50% of its total export earnings. A price drop to $50 per barrel, especially if sustained, creates a ripple effect across multiple economic dimensions.
First, there’s a direct hit to government revenue. Russia’s 2025 budget was reportedly planned with an oil price assumption of around $70 per barrel for Urals crude. At $50 per barrel, this creates a shortfall. For context, Russia exports roughly 4.8 million barrels per day of crude oil. A $20-per-barrel drop below the budgeted price translates to an annual revenue loss of approximately $35 billion (4.8 million barrels/day × $20 × 365 days). This gap forces the government to either cut spending, dip into reserves, or increase borrowing—each with its own downsides. Military spending, a priority amid ongoing conflicts, could strain this further, as it’s estimated to consume over 6% of GDP in 2025.
Second, the ruble takes a hit. Oil prices and the Russian currency are tightly linked—when oil prices fall, the ruble typically weakens. In 2008, when Urals crude dropped below $50 per barrel, the ruble faced severe pressure, and the central bank had to intervene heavily. A weaker ruble drives up inflation by increasing the cost of imports, which Russia relies on for many goods despite sanctions. Inflation was already a concern in 2024, hovering around 8-9%, and a $50 oil price could push it higher, eroding purchasing power for ordinary Russians.
Third, the budget deficit widens. Russia’s fiscal breakeven oil price—the price needed to balance its budget—has varied over time but was estimated at around $50-$55 per barrel in recent years, thanks to conservative budgeting and a weaker ruble boosting local-currency oil revenues. At $50 per barrel, the budget might just break even or slip into a deficit, depending on production costs and tax adjustments. However, with heightened war-related expenditures (estimated at $100 billion annually), the actual breakeven price could be closer to $60-$70, meaning $50 oil would force reliance on the National Wealth Fund, which held about $332 billion in liquid reserves as of late 2024. These reserves provide a cushion, but draining them risks long-term economic stability.
Fourth, oil companies feel the squeeze. Russian oil firms like Rosneft operate with production costs around $20-$30 per barrel, so $50 oil still leaves a profit margin. But sanctions and higher shipping costs (due to the “shadow fleet” and longer routes to Asia) eat into this. Reduced profits could limit reinvestment in exploration or maintenance, potentially shrinking future output—a slow-burn problem for an economy where oil is 25% of GDP.
Finally, broader economic growth stalls or reverses. Low oil prices in 2014-2015, when prices fell below $50, triggered a recession in Russia, with GDP shrinking 2-3%. A similar scenario in 2025 could tip the economy into negative growth, especially if global demand weakens (e.g., due to U.S. tariffs or a Chinese slowdown). Social unrest could rise as inflation and unemployment climb, though the Kremlin’s control over media and dissent might mute this initially.
Recent developments reinforce this picture. In early April 2025, reports noted Urals crude dipping toward $50 amid a global oil price rout, prompting Kremlin statements about minimizing economic fallout. This aligns with historical patterns—e.g., in 2008, when oil fell below $50, reserves dropped by over $100 billion in months to prop up the ruble and economy. Sanctions since 2022 have made Russia more resilient by redirecting exports to India and China, but at steeper discounts (e.g., $12-$18 below Brent in 2024), amplifying the pain of a $50 price.
Wait till they learn Putin has drained their pension fund to pay for this two-week war.
what’s it like in the 1980s? :)
I dont care what happens to Russia.
I DONT CARE what happens to Ukraine.
Why do some feel the need to always meddle?
Let them fight..or folks can go themselves to fight or send THEIR kin..and money.
I dont want a DIME or ONE AMERICAN SOLDIER sent over there.
Rusia can’t defeat Ukraine in over 3 years..yet YOU CANNOT GET THAT COUNTRY OUT OF YOUR MIND...you gotta try bro :)
chuckling at that :)
Is Reuters rooting for the Ruskies?
The softly or even unspoken assumption by pro-Russian factions here is that Russia is remaining mired in Ukraine for 3 years because they are not trying very hard. And if ever they were to start trying hard to really win faster, they could do so anytime they want.
ok......
What does this benefit Putin and Russia to go slow and half- heartedly, in their invasion? Besides seeming ridiculous as a strategy, If Russia is dragging this out 3 years now, though able to win quickly at any time, if they only wanted to? Why would Russia not want to win quickly and have done it 2.75 years ago? If the West grew spines and got fearless, what would Russia really do?
If the West placed 6 divisions of armor, and made Ukraine a no-fly zone fr Russia by air superiority, would the Russians fling nukes? I doubt it.
Russia is selling oil to India at large discount and in turn India sell that oil to Europe I’ve read. What will happen to that arrangement do you think?
Pass the bong!
I post this due to its strategic implications for Trump’s efforts to solve the Iran crisis, decouple Russia/China and further his tariff battles. I don’t care a fig about Ukraine. Ukraine is a done deal regardless of how much longer Z and the Euroweenies try to muck things up. We’re out, Russia won in Ukraine, end of that conversation.
Trump is about to have his “Unleashing American Energy Executive Order” Event. I’d suggest you watch and when Trump makes similar remarks about this as I do, you can make the same petty, ridiculous remarks at your TV screen.
Russia has been around much, much longer than the “ West”, and will still be around right up to “ the end”.
You obviously didn’t read what was posted. Are you pi$$ed that Trump has Putin by the short hairs on this? You must be one of those Putin stooges I’ve been hearing about so long if this great news upsets you.
https://media.cnn.com/api/v1/images/stellar/prod/190111163455-russia-t-34-tank.jpg?q=x_107,y_181,h_1347,w_2394,c_crop/h_653,w_1160/f_webp
Putin will either bankrupt Russia by continuing selling Russian crude, with the discount, at $40 a barrel to China and India or he will cry uncle and get in line with Trump. It also will put China and India back in the oil market at market prices. The US will fill those Chinese and Indian energy needs with American products.
What in God’s Name does that have to do with Putin losing his shirt on his oil sales? Get over the Uke War. We’re out! Go cry about the demise of your neocon wet dream to someone else.
You shouldn’t start drinking so early. It makes you mean.
“What in God’s Name does that have to do with Putin losing his shirt on his oil sales?”
BEFORE losing his shirt on a two-week war he was so hard up he was calling upm80 year old tanks.
Russia is going broke.
Russia has only been around for 34 years.
This is just a trick to fool people into thinking Trump is not a Russian asset. /S
Wait wut? Oil prices are down? Next you'll tell me inflation is coming down and jobs are way up! Ridiculous! Wait, all that too? Huh.
The price of oil tanking (so to speak) happened on the 2nd of this month. That’s when tariffs were announced coincidentally.
Besides a price drop effecting Russia I don’t think this has to do directly with them. It will effect all oil producing countries like Nigeria and Saudi Arabia.
https://finance.yahoo.com/quote/CL%3DF/
Reuters roots for whoever is against America at any given time.
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